Northern Equipment Corporation purchased all the

outstanding common stock of

Northern Equipment Corporation purchased all the outstanding common stock of Pioneer
Equipment Rental for $5,500,000 in cash. The book value of Pioneer's net assets (assets minus
liabilities) was $3,900,000. The book values and fair values of Pioneer's assets and liabilities
were:.............................................Book Value .................Fair ValueReceivables
..................................$ 650,000 ..................$ 550,000Property, plant, and equipment
............4,000,000..................4,700,000Intangible assets ...............................100,000
....................600,000Liabilities ......................................(850,000) ..................(850,000)Net
assets ....................................$3,900,000............... $5,000,000Required:1. Calculate the
amount paid for goodwill.2. Record Northern Equipment's acquisition of Pioneer Equipment
Rental.View Solution: Northern Equipment Corporation purchased all the outstanding common
stock of
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